RELATING TO HEALTH INSURANCE; ENACTING THE NEW MEXICO HEALTH
INSURANCE EXCHANGE ACT; CREATING THE NEW MEXICO HEALTH
INSURANCE EXCHANGE; PROVIDING FOR THE APPOINTMENT, POWERS AND
DUTIES OF A BOARD OF DIRECTORS FOR THE EXCHANGE; PROVIDING THE
SUPERINTENDENT OF INSURANCE OF THE PUBLIC REGULATION COMMISSION
WITH RULEMAKING POWERS RELATING TO THE EXCHANGE; PROVIDING FOR
POWERS AND DUTIES OF THE EXCHANGE; PROVIDING FOR TRANSPARENCY
OF EXCHANGE FUNDING AND OPERATIONS; AMENDING THE TORT CLAIMS
ACT TO ADD EXCHANGE STAFF AND BOARD MEMBERS UNDER PUBLIC
EMPLOYEE PROTECTIONS; AMENDING AND ENACTING SECTIONS OF THE
NMSA 1978; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION
OF LAW IN LAWS 2009; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1
through 9 of this act may be cited as the "New Mexico Health
Insurance Exchange Act".

B. "carrier" means a person that is subject to
licensure by the superintendent or subject to the provisions of
the New Mexico Insurance Code and that provides one or more
health benefits or insurance plans in the state;

D. "employee" means an individual hired by another
individual or entity for a wage or fixed payment in exchange
for personal services and who does not provide the services as
part of an independent business;

E. "exchange" means the New Mexico health insurance
exchange;

F. "health care provider" means an individual who
is licensed, certified or otherwise authorized or permitted by
law pursuant to Chapter 61 NMSA 1978 to provide health care in
the ordinary course of business or practice of a profession;

G. "member" means a person appointed to the board
of directors of the exchange;

H. "Native American" means:

(1) an individual who is a member of any
federally recognized Indian nation, tribe or pueblo; or

(2) an individual who has been deemed eligible
for services and programs provided to Native Americans by the
United States public health service or the bureau of Indian
affairs;

I. "qualified employer" means a small employer that
elects to make its full-time employees, and, at the option of
the employer, some or all of its part-time employees, eligible
for one or more qualified health plans offered in the small
group market through the exchange; provided that the employer:

(1) has its principal place of business in the
state and elects to provide coverage through the exchange to
all of its eligible employees, wherever employed; or

(2) elects to provide coverage through the
exchange to all of its eligible employees who are principally
employed in the state;

J. "qualified health plan" means health insurance
coverage or a group health plan that the board has determined
as meeting the requirements in federal law for coverage to be
offered through the exchange;

K. "qualified individual" means an individual who:

(1) seeks to enroll or who participates in a
qualified health plan offered through the exchange and who
meets one of the following residency requirements:

(a) the individual is a resident of the
state and is, and continues to be, legally domiciled and
physically residing on a full-time basis in a place of
habitation in the state that remains the person's principal
residence and from which the person is absent only for a
temporary or transitory purpose;

(b) the individual is a full-time
student attending an educational institution outside of the
state but, prior to attending the educational institution, met
the requirements of Subparagraph (a) of this paragraph;

(c) the individual is a full-time
student attending an institution of higher education located in
the state;

(d) the individual, whether a resident
or not, is a dependent; or

(e) the individual, whether a resident
or not, is an employee of a qualified employer;

(2) is not incarcerated at the time of
enrollment, other than incarceration pending the disposition of
charges; and

(3) is a citizen or national of the

United States or an alien lawfully present in the United
States, or who is reasonably expected to be a citizen or
national of the United States or an alien lawfully present in
the United States during the entire period for which enrollment
in the exchange is sought;

L. "small employer" means a person that is actively
engaged in business that employed an average of at least one
but not more than fifty full-time-equivalent employees on
business days during the preceding calendar year and that
employs at least one employee in the first day of the plan
year; provided that:

(1) the small employer elects to make all
full-time employees eligible for one or more qualified health
plans offered in the small group market through the exchange;

(2) persons that are affiliated persons or
that are eligible to file a combined tax return for purposes of
state income taxation shall be considered one small employer;

(3) in the case of an employer that was not in
existence throughout a preceding calendar year, the
determination of whether the employer is a small employer shall
be based on the average number of employees that the employer
is reasonably expected to employ on working days in the current
calendar year; and

(4) the person is not a self-insured entity;
and

M. "superintendent" means the superintendent of
insurance of the insurance division of the public regulation
commission or the division's successor in interest.

A. The "New Mexico health insurance exchange" is
created as a nonprofit public corporation to provide qualified
individuals and qualified employers with increased access to
health insurance in the state and shall be governed by a board
of directors constituted pursuant to the provisions of the New
Mexico Health Insurance Exchange Act. The exchange is a
governmental entity for purposes of the Tort Claims Act, and
neither the exchange nor the board shall be considered a
governmental entity for any other purpose.

B. The "board of directors of the New Mexico health
insurance exchange" is created. The board consists of twelve
members: ten voting members and two nonvoting, ex-officio
members. One nonvoting ex-officio member is the secretary of
human services or the secretary's designee. One nonvoting
ex-officio member is the superintendent or the superintendent's
designee.

C. A member shall not be appointed if that member's
participation in the decisions of the board could benefit that
member's own financial interests or the financial interests of
an entity that member represents. A board member who develops
a conflict of interest shall resign or be removed from the
board.

D. Each board member and employee of the exchange
shall have a fiduciary duty to the exchange.

E. The board shall be composed, as a whole, to
assure representation of the state's Native American
population, ethnic diversity, cultural diversity and geographic
diversity. Board members shall have demonstrated knowledge or
experience in at least one of the following areas:

(1) purchasing coverage in the individual
market;

(2) purchasing coverage in the small employer
market;

(3) health care finance;

(4) health care economics;

(5) health care policy;

(6) the enrollment of underserved residents in
health care coverage; or

(7) administering private or public health
care insurance.

F. Each of the ten appointed voting members shall
be a resident of the state. Selection of the ten appointed
voting members shall be as follows:

(1) the governor shall appoint two members as
follows:

(a) one member shall be an officer,
general partner or proprietor of a qualified employer; and

(b) one member shall be at large;

(2) the president pro tempore of the senate
shall appoint two members as follows:

(a) one member shall be a representative
of consumers in the individual insurance market; and

(b) one member shall be at large;

(3) the senate minority floor leader shall
appoint two members as follows:

(a) one member shall be an employee of a
small business; and

(b) one member shall be at large;

(4) the speaker of the house of
representatives shall appoint two members as follows:

(a) one member shall be a consumer in
the individual insurance market; and

(b) one member shall be at large; and

(5) the minority floor leader of the house of
representatives shall appoint two members as follows:

H. A member shall serve until the member's
successor is appointed by the respective appointing authority.

I. The exchange and the board shall operate
consistent with provisions of the Governmental Conduct Act, the
Inspection of Public Records Act, the Financial Disclosure Act
and the Open Meetings Act and shall not be subject to the
Procurement Code or the Personnel Act.

J. A majority of members constitutes a quorum. The
board may allow members to attend meetings by telephone or
other electronic media. A decision by the board requires a
quorum and a majority of members in attendance voting in favor
of the decision.

K. Within sixty days of the effective date of the
New Mexico Health Insurance Exchange Act, the superintendent
shall convene the organizational meeting of the board, during
which the board shall elect a chair and vice chair from among
its members. Thereafter, every three years the board shall
elect in an open meeting a chair and vice chair from among its
members. The chair and vice chair shall serve no more than two
consecutive three-year terms as chair and vice chair.

L. A vacancy on the board shall be filled by
appointment by the original appointing authority for the
remainder of the member's unexpired term.

M. A member may be removed from the board by a
majority vote of the members. The board shall set standards
for attendance and may remove a member for conflict of interest
pursuant to Subsection C of this section, lack of attendance,
neglect of duty or malfeasance in office. A member shall not
be removed without proceedings consisting of at least one
ten-day notice of hearing and an opportunity to be heard.
Removal proceedings shall be before the board and in accordance
with procedures adopted by the board.

N. Appointed members may receive per diem and
mileage in accordance with the Per Diem and Mileage Act,
subject to the travel policy set by the board. Appointed
members shall receive no other compensation, perquisite or
allowance.

O. The board shall meet at the call of the chair
and no less often than once per calendar quarter. There shall
be at least seven days' notice given to members prior to any
meeting. There shall be sufficient notice provided to the
public prior to meetings, consistent with the Open Meetings
Act.

P. The board shall create, make appointments to and
duly consider recommendations of an advisory committee or
committees made up of stakeholders, including carriers, health
care consumers, health care providers, health care
practitioners, brokers, qualified employer representatives and
advocates for low-income or underserved residents.

Q. The board shall create an advisory committee
made up of Native Americans, some of whom live on a reservation
and some of whom do not live on a reservation, to guide the
implementation of the Native-American-specific provisions of
the federal Patient Protection and Affordable Care Act of 2010
and the federal Indian Health Care Improvement Act.

SECTION 4. [NEW MATERIAL] BOARD OF DIRECTORS--POWERS.--The board may:

A. seek and receive grant funding from federal,
state or local governments or private philanthropic
organizations to defray the costs of operating the exchange;

B. generate funding, including but not limited to
charging assessments or fees, to support its operations in
accordance with provisions of the New Mexico Health Insurance
Exchange Act;

C. create ad hoc advisory councils;

D. request assistance from other boards,
commissions, departments, agencies and organizations as
necessary to provide appropriate expertise to accomplish the
exchange's duties;

E. enter into contracts with persons or other
organizations as necessary or proper to carry out the
provisions and purposes of the New Mexico Health Insurance
Exchange Act, including the authority to contract or employ
staff for the performance of administrative, legal, actuarial,
accounting and other functions, provided that no contractor
shall be a carrier;

F. enter into contracts with similar exchanges of
other states for the joint performance of common administrative
functions;

G. enter into information-sharing agreements with
federal and state agencies and other state exchanges to carry
out its responsibilities; provided that these agreements
include adequate protections of the confidentiality of the
information to be shared and comply with all state and federal
laws and regulations;

H. sue or be sued or otherwise take any necessary
or proper legal action in the execution of its duties and
powers;

I. appoint board committees, which may include
non-board members, to provide technical assistance in the
operation of the exchange and any other function within the
authority of the exchange; and

J. conduct periodic audits to assure the general
accuracy of the financial data submitted to the exchange.

SECTION 5. [NEW MATERIAL] PLAN OF OPERATION.--

A. The board shall create a plan of operation
containing provisions to ensure the fair, reasonable and
equitable administration of the exchange.

B. The board shall provide for public notice and
hearing prior to approving the plan of operation.C. The plan of operation shall:

(1) establish procedures to implement the
provisions of the New Mexico Health Insurance Exchange Act
consistent with state law, approved waiver of federal law, the
federal Patient Protection and Affordable Care Act of 2010 and
other federal law, including:

(a) determination of which qualified
health plans will be offered through the exchange;

(b) eligibility determination for the
exchange and related public programs;

(c) enrollment of qualified individuals
and qualified employers; and

(d) administration of assessments and
fees;

(2) establish procedures for handling and
accounting for the exchange's assets and money;

(3) establish regular times and meeting places
for meetings of the board;

(4) establish a program to publicize the
existence of the exchange, the qualified health plans, the
eligibility requirements and procedures for enrollment in a
qualified health plan, medicaid or other public health coverage
program and to maintain public awareness of the exchange;

(5) establish consumer complaint and grievance
procedures for issues raised with the exchange;

(6) establish procedures for alternative
dispute resolution between the exchange and contractors or
carriers;

(7) establish conflict of interest policies
and procedures; and

(8) contain additional provisions necessary
and proper for the execution of the powers and duties of the
board.

SECTION 6. [NEW MATERIAL] BOARD DUTIES--REPORTING.--The
board shall:

A. consult with representatives of New Mexico
Indian nations, tribes and pueblos and develop and implement
policies that:

(1) promote effective communication and
collaboration between the exchange and Indian nations, tribes
and pueblos, including communicating and collaborating on those
nations', tribes' and pueblos' plans for creating or
participating in health insurance exchanges; and

B. designate a Native American liaison, who shall
assist the executive director of the exchange in developing and
ensuring implementation of communication and collaboration
between the exchange and Native Americans in the state. The
tribal liaison shall serve as a contact person between the
exchange and New Mexico Indian nations, tribes and pueblos and
shall ensure that training is provided to the staff of the
exchange;

C. between July 1, 2012 and January 1, 2014 provide
quarterly reports to the legislature, the governor and the
superintendent on the implementation of the exchange and report
annually and upon request thereafter;

D. by July 1, 2013:

(1) report findings and submit recommendations
to the legislative health and human services committee, the
legislative finance committee and the superintendent on how to
avoid adverse selection and how to assess and improve the
quality and affordability of qualified health plans that will
be offered on the exchange; and

(2) provide legislative recommendations to the
legislative health and human services committee and the
legislative finance committee on whether to change the number
of full-time-equivalent employees in the definition of "small
employer" from fifty to one hundred before January 1, 2016.
The board shall recommend a transition plan for the exchange
and carriers to follow when changing the definition of "small
employer", whether the change occurs prior to or on January 1,
2016;

E. by July 1, 2013 provide recommendations to the
legislative finance committee and other appropriate interim
legislative committees on mechanisms for funding the operations
of the exchange and a plan for achieving self-sufficiency,
including the use of any assessments or fees;

F. by July 1, 2016, provide legislative
recommendations to the legislative health and human services
committee and the legislative finance committee on whether to:

(1) continue limiting qualified employer
status to small employers and, if qualified employer status is
extended to large employers, whether to combine the large
employer risk pool with the small group market;

(2) combine the individual, small group and
the large employer markets into a single risk pool; and

(3) enter into an exchange with other states
or share resources or responsibilities to enhance the
affordability of operating the exchange;

G. keep an accurate accounting of all of the
activities, receipts and expenditures of the exchange and
submit this information annually to the superintendent and as
required by federal law to the federal secretary of health and
human services;

H. beginning with the first year of operation in
which access to health insurance coverage is provided, obtain
an annual audit of the exchange's operations from an
independent certified public accountant;

I. cooperate with the medical assistance division
of the human services department to share information and
facilitate transitions in enrollment between the exchange and
medicaid, the state children's health insurance program or any
other state public health coverage program;

J. publish the administrative costs of the exchange
as required by state or federal law; and

K. discharge those duties required to implement and
operate the exchange in accordance with the provisions of the
New Mexico Health Insurance Exchange Act consistent with state
and federal law.

SECTION 7. [NEW MATERIAL] RULES--DISPUTE RESOLUTION.--

A. The superintendent shall promulgate rules
necessary to implement and carry out the provisions of the New
Mexico Health Insurance Exchange Act.

B. The superintendent shall promulgate rules for
resolving disputes arising from the operation of the exchange
in accordance with the provisions of the New Mexico Health
Insurance Exchange Act, including with respect to:

(1) the eligibility of an individual, employer
or carrier to participate in the exchange;

(2) receiving an exemption from any state or
federal individual requirement to retain minimum essential
coverage; and

(3) the exchange's collection and transmission
to the applicable qualified health plans any applications for
enrollment and all premium payments or contributions made by or
on behalf of qualified individuals or qualified employers
participating in the exchange.

SECTION 8. [NEW MATERIAL] EXEMPTION.--The exchange is
exempt from payment of all fees and all taxes levied by this
state or any of its political subdivisions.

SECTION 9. [NEW MATERIAL] FUNDING.--

A. To fund the planning, implementation and
operation of the exchange, the board shall contract with the
human services department or any other state agency that
receives federal funds allocated, appropriated or granted to
the state for purposes of funding the planning, implementation
or operation of a health insurance exchange.

B. The human services department or any other state
agency that receives federal funds allocated, appropriated or
granted to the state for purposes of funding the planning,
implementation or operation of a health insurance exchange
shall contract with the board to provide those funds to the
exchange in consideration for its planning, implementation or
operation.

SECTION 10. [NEW MATERIAL] COOPERATION WITH THE NEW
MEXICO HEALTH INSURANCE EXCHANGE.--The medical assistance
division of the human services department, or its successor in
interest, shall cooperate with the New Mexico health insurance
exchange to share information and facilitate transitions in
enrollment between the exchange and medicaid, the state
children's health insurance program or any other state public
health coverage program.

SECTION 11. A new section of the New Mexico Insurance
Code is enacted to read:

"[NEW MATERIAL] INSURANCE DIVISION--COOPERATION WITH NEW
MEXICO HEALTH INSURANCE EXCHANGE.--The insurance division, or
its successor in interest, shall cooperate with the New Mexico
health insurance exchange to share information and assist in
the implementation of the functions of the exchange."

B. "governmental entity" means the state or any
local public body as defined in Subsections C and H of this
section;

C. "local public body" means all political
subdivisions of the state and their agencies, instrumentalities
and institutions and all water and natural gas associations
organized pursuant to Chapter 3, Article 28 NMSA 1978;

D. "law enforcement officer" means a full-time
salaried public employee of a governmental entity, or a
certified part-time salaried police officer employed by a
governmental entity, whose principal duties under law are to
hold in custody any person accused of a criminal offense, to
maintain public order or to make arrests for crimes, or members
of the national guard when called to active duty by the
governor;

E. "maintenance" does not include:

(1) conduct involved in the issuance of a
permit, driver's license or other official authorization to use
the roads or highways of the state in a particular manner; or

(2) an activity or event relating to a public
building or public housing project that was not foreseeable;

F. "public employee" means an officer, employee or
servant of a governmental entity, excluding independent
contractors except for individuals defined in Paragraphs (7),
(8), (10), (14) and (17) of this subsection, or of a
corporation organized pursuant to the Educational Assistance
Act, the Small Business Investment Act or the Mortgage Finance
Authority Act or a licensed health care provider, who has no
medical liability insurance, providing voluntary services as
defined in Paragraph (16) of this subsection and including:

(1) elected or appointed officials;

(2) law enforcement officers;

(3) persons acting on behalf or in service of
a governmental entity in any official capacity, whether with or
without compensation;

(4) licensed foster parents providing care for
children in the custody of the human services department,
corrections department or department of health, but not
including foster parents certified by a licensed child
placement agency;

(5) members of state or local selection panels
established pursuant to the Adult Community Corrections Act;

(6) members of state or local selection panels
established pursuant to the Juvenile Community Corrections Act;

(11) members of the board of directors of the
New Mexico educational assistance foundation;

(12) members of the board of directors of the
New Mexico student loan guarantee corporation;

(13) members of the New Mexico mortgage
finance authority;

(14) volunteers, employees and board members
of court-appointed special advocate programs;

(15) members of the board of directors of the
small business investment corporation;

(16) health care providers licensed in New
Mexico who render voluntary health care services without
compensation in accordance with rules promulgated by the
secretary of health. The rules shall include requirements for
the types of locations at which the services are rendered, the
allowed scope of practice and measures to ensure quality of
care; [and]

(17) an individual while participating in the
state's adaptive driving program and only while using a
special-use state vehicle for evaluation and training purposes
in that program; and

(18) the staff and members of the board of
directors of the New Mexico health insurance exchange;

G. "scope of duty" means performing any duties that
a public employee is requested, required or authorized to
perform by the governmental entity, regardless of the time and
place of performance; and

H. "state" or "state agency" means the state of New
Mexico or any of its branches, agencies, departments, boards,
instrumentalities or institutions."

SECTION 13. SEVERABILITY.--If any part or application of
this act is held invalid, the remainder or its application to
other situations or persons shall not be affected.

SECTION 14. APPROPRIATION.--One hundred thousand dollars
($100,000) is appropriated from the general fund to the board
of directors of the New Mexico health insurance exchange for
expenditure in fiscal year 2013 to establish and operate a
health insurance exchange pursuant to the provisions of the New
Mexico Health Insurance Exchange Act. Any unexpended or
unencumbered balance remaining at the end of fiscal year 2013
shall revert to the general fund.